Whole Foods (Nasdaq: WFM) Is the Envy of Peers, but Is It a "Buy"?

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The organic foods business is a $60 billion global industry, and no other grocery chain has profited from this boom as much as Whole Foods Market Inc. (Nasdaq: WFM).

Whole Foods is leading the charge of supplying organic, natural, and locally grown foods to the health-conscious eater. Founded in 1980, it now has a count of 355 stores in 40 states and 3 countries.

WFM stock has shown astronomic growth as well, with shares up nearly 500% in five years.

The growth will continue. According to the U.S. Food and Drug Administration, organic food consumption has gone up 9% per year over the last five years. Future growth rates could be greater than 8% annually.

That's why competition is increasing. A slew of competitors are taking a page out of Whole Foods' book and expanding rapidly.

Whole Foods Clear Advantage

Whole Foods is doing something that may seem impossible – it is thriving in troubled economic times. Profits rose 20% in the most recently reported quarter, with earnings per share of 38 cents and revenue rising more than 12%.

Whole Foods sales of $11.7 billion in 2012 account for only 2% of the U.S. supermarket industry. To capitalize on this still-growing industry, Whole Foods has laid out plans to increase its store count to 1,000 over the long term.

One advantage Whole Foods has over the competition: the shopping experience. It's not one that other stores have duplicated.

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